“Analysts at Sanford C. Bernstein this week highlighted what they characterize as a kind of licensing loophole affecting the hit iPhone, which they say puts a limit on the amount of money that flows into Qualcomm’s bank account,” Clark reports. “They estimate the savings provides a lift to Apple’s operating profit that should top $280 million for fiscal 2009 and $400 million for fiscal 2010.”
Clark reports, “Conversely, if Qualcomm could somehow manage to change the situation, the additional money that could flow to the chip maker would be ‘a stunning 9% boost’ to estimates for Qualcomm’s 2010 operating profits, say analysts Toni Sacconaghi and Stacy Rasgon, authors of the Bernstein report. Neither Qualcomm nor Apple will comment on their thesis. Explaining how the analysts arrived at it requires a short dive into Qualcomm’s business model.”
“Sacconaghi and Rasgon say the royalties paid to Qualcomm are based on the price Apple pays Foxconn for each iPhone–about $244, they estimate–not the wholesale price that Apple charges carriers like AT&T for iPhones, which they say averages about $590,” Clark reports.
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